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Thursday's Big Oil & Natural Gas Play

Anadarko Petroleum on Thursday is about 9 percent below its all-time high from 2008, and one big option trader expects it to blow past that level in the next month.

OptionMonster's real-time systems detected the purchase of 6,000 May 85 calls for $0.30 against open interest of only 1,028 contracts. The trade accounted for more than three-quarters of the options volume in the energy stock so far today.

The oil and gas producer is up about 1 percent to $74.83 in morning trading. The shares have spent about two months between $69 and $74, consolidating above their high from last year. The next important level is the $81.36 peak established during the bull market for natural gas in the spring of 2008.

The stock must break out to new highs and rally at least 15 percent in the next five weeks for the options bought today to turn a profit. Anadarko is scheduled to release its next earnings results on May 3.

Calls account for 94 percent of the overall option volume in the name so far today, which reflects the bullish sentiment.

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Disclosures:

Russell does not own a significant amount of shares in Anadarko Petroleum.

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Anadarko's Peers/Rivals:

Dynegy

EOG Resources

El Paso

Devon Energy

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Options Trading School:

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David Russell is a reporter and writer for OptionMonster.

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